COSTA RICA Law and Practice Contributed by: Claudio Donato Monge, Marco Lopez, Claudio A Donato Lopez and Carolina Retana, Zurcher, Odio & Raven
The Competition Commission has extensive investi - gation powers. If it has substantiated that there was a concentration that was not notified, then it may start an investigation, in which it may request any informa - tion and contracts associated with the transaction, as well as any additional information. With prior authori - sation issued by a judge, the Competition Commis - sion may also execute dawn raids on the premises of the parties involved. 2.12 Requirement for Clearance Before Implementation The law establishes a suspensive effect over merger notifications. As such, a transaction cannot be imple - mented until clearance is obtained. However, the parties may request a waiver of the suspensive effects of the notification. In order to do so, they must file a specific application where they demonstrate the reasons or motives that justify such waiver. 2.13 Penalties for the Implementation of a Transaction Before Clearance Merger control is suspensory. If the parties did not request a waiver of the suspensive effects of the noti - fication, they must submit the notification and receive clearance prior to closing. Failure to file the notifica - tion or await clearance may result in financial pen - altiesand other measures, such as divestiture or de- concentration. Fines range from 0.1% to 10% of the parties’ total revenues generated in Costa Rica during the fiscal year preceding the sanction’s imposition. Since suspensive effect has only recently been intro - duced, no penalties have yet been imposed for imple - menting a transaction before obtaining clearance. 2.14 Exceptions to Suspensive Effect There are no specific exceptions to the suspensive effect. However, the ASCA provides that the Competi - tion Commission, under qualified circumstances, may waive the suspensive effect, although there are not yet any precedents regarding such waiver. The acquisition of a failing firm may be used as a jus - tification to request derogation from the suspensive effect, if the parties can demonstrate that waiting for
clearance prior to implementing the transaction could result in the failing firm deteriorating its position to a point where the transaction would not be closed. 2.15 Circumstances Where Implementation Before Clearance Is Permitted Under qualified circumstances, and subject to the Competition Commission’s authorisation, the parties may be authorised to close and implement the trans - action prior to clearance. 3. Procedure: Notification to Clearance 3.1 Deadlines for Notification There are no specific deadlines other than the obliga - tion to notify the concentration prior to its closing. Other deadlines may arise during the process – for example, the deadline to provide the information requested in the Competition Commission’s RFI, or the deadline to provide conditions. 3.2 Type of Agreement Required Prior to Notification The notification may be filed with any agreement, such as a share purchase agreement, or even a letter of intent or a memorandum of understanding. The noti - fication may also be filed without a written agreement, as long as the terms disclosed are not varied con - siderably once the formal agreement is drafted and signed. 3.3 Filing Fees No filing fees are currently payable for merger notifica - tions before the Competition Commission. However, the ASCA authorises the Competition Commission to establish fees for the processing of merger notifica - tions, based on a service-at-cost principle and subject to the methodology being established by technical regulation. At the time of writing, such fees have not been implemented in practice. 3.4 Parties Responsible for Filing All of the parties involved are responsible for filing. The filing made by one party would fulfil the filing obliga - tions of the remaining parties.
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